While Sanyo has reported that it will lower its digital camera production target following 'weaker than expected demand', Canon has announced a 40% profit on last year due to 'robust sales of digital cameras' and other equipment. Canon, which has been number one digital camera manufacturer for the fourth month running (in the US), has also lowered its forecast by 500,000 units to 14.7 million units, which is still 70% more than last year (8.6 million units). Sanyo is one of the world's largest digital camera manufacturers, producing OEM products for Olympus and Nikon. It plans to cut production by 5 million units to 15 million. A Sanyo spokesperson says this is due to the popularity of digital cameras slowing in Japan and competitive pricing among manufacturers, which is affecting profit margins.

Press Release:

Japan's Sanyo cuts digital camera production plans

TOKYO, Oct 28 (Reuters) - Japanese electronics maker Sanyo Electric Co. Ltd. lowered its digital camera production target for the current business year by over 20 percent on Thursday due to weaker than expected demand. Sanyo is one of the world's largest manufacturers of digital cameras, but more than 90 percent of its output supplies other companies such as Olympus Corp. and Nikon Corp. under original equipment manufacturer (OEM) agreements. The Osaka-based company slashed its production target for the current business year to March 31 to 14 million units from 18 million units, and said it planned to lower its output capacity target to 15 million digital cameras from 20 million. "Inventories increased a bit to levels that exceeded our initial expectations so we have cut back on our production plans," said Sanyo spokesman Atsushi Watanabe. Digital cameras are one of the pillars of the recent digital electronics boom, but growth is slowing in Japan and other key markets due to rising penetration rates, and manufacturers are struggling to maintain profit margins as prices fall. Canon Inc. also cut its digital camera forecast on Thursday. It now expects to sell 14.7 million units in 2004, down from its previous estimate of 15.2 million. Canon sold 8.6 million digital cameras last year. Earlier on Thursday, Sanyo said its group net profit for the six months to Sept. 30 fell 65 percent to 3.4 billion yen from 9.78 billion yen a year earlier, citing falling product prices and higher raw materials costs. Sanyo cut its group net profit forecast for the full year to March to 14 billion yen from 16 billion yen, while trimming its sales outlook by 20 billion yen to 2.58 trillion yen.

Shares of Sanyo ended Thursday trade up 1.17 percent at 346 yen before the announcement, roughly in line with the benchmark Nikkei average's gain of 1.51 percent. ($1=106.63 yen).

Canon Q3 net profit rises 39.4%

TOKYO (CBS.MW) - Japan's Canon Inc. said Thursday its third-quarter net profit rose 39.4 percent to a record from a year earlier on robust sales of digital cameras, laser beam printers and semiconductor-production equipment, and upgraded its full-year earnings forecast.

The world's biggest maker of copiers said its net profit for the three months ended Sept. 30 rose to 101.78 billion yen ($960 million) from 73 billion yen a year ago.

Operating profit for the quarter rose 26.1 percent to a record 158.3 billion yen. Sales rose 9.2 percent to 838.3 billion yen.

For the fourth quarter, Canon said that the digital camera market is expected to continue growing at a rapid pace, particularly in the overseas markets.

While new orders from the semiconductor production equipment market are expected to slow down somewhat, the level of capital investment by semiconductor manufacturers is likely to remain steady.

For the year ending December, the company raised its net profit forecast to 339 billion yen from 320 billion, while revising its income before income taxes and minority interests to 548 billion yen from 520 billion yen.

It left its full-year sales forecast unchanged at 3.47 trillion yen.

Shares of Canon (CAJ: news, chart, profile) (JP:7751: news, chart, profile) ended up 2.2 percent in Tokyo ahead of the announcement. The Nikkei Average rose 1.5 percent.